The Role of the Attorney Review in Home Buying
Certified Financial Counselor
Ashley Altus is a writer and certified financial counselor through the National Association of Certified Credit Counselors.
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If you’re on the path to homeownership, you’ve probably come to realize that contracts and the buying process is anything but simple. For a better understanding of all the paperwork you need to complete, a real estate attorney can help.
"Real estate attorneys are essential in the home buying process because they explain the contracts and the legal obligations as a party to a real estate transaction," says Allison Orenstein, a real estate attorney at Ligris and Associates.
In some states, an attorney coordinates the entire transaction process, while in others, a real estate lawyer will only get involved in complex matters.
For buyers and sellers, a real estate attorney can serve as a trusted expert on their team. Real estate attorneys review documents and contracts; sometimes, they conduct a title search for property and can coordinate the transfer of money to buy the home in some states. They can also help buyers translate legal terms into plain language for a clearer understanding of their real estate contract.
What Is Attorney Review In Real Estate?
Before the official sale of the home, the seller and the buyer may consult with their respective attorneys to look over the real estate contract. From here, the buyer and seller’s attorneys can help provide guidance and propose addendums to the terms of the contract. This process is known as attorney review.
It’s important to note that the attorney review process is only applicable in certain states. If you aren’t sure if the attorney review process will be part of your homebuying experience, a real estate agent or a mortgage advisor may be able to point you in the right direction.
How The Attorney Review Protects Buyers
A real estate attorney’s job is to do a deep dive into the housing contract and documentation and protect their clients from major issues. With an attorney on your side, you’ll have access to legal advice throughout the home-buying process.
"A real estate attorney will interpret the legal importance of the terms on the offer to purchase and negotiate the rest of the terms following the acceptance of the offer,” Orenstein says. “This ensures that your legal rights under the contract are protected and preserved."
How Much Does An Attorney Review Cost?
Buying a home costs thousands of dollars (in addition to the mortgage commitment), so it’s natural to wonder how much you’ll need to shell out for an attorney review.
Attorney fees for buying a home can range, but expect to shell out at least a few hundred dollars. However, take this as a rough estimate.
The attorney fee should help cover the conducting of title searches and guidance throughout negotiation and closing processes. The final price of legal representation during the home buying process will depend on factors like the extent of services and time commitment you require, your location, and the attorney’s fee structure. A more experienced real estate attorney may also have a higher fee.
Do I Need To Hire A Real Estate Attorney?
The short answer: maybe. Whether or not you’ll need to involve a real estate lawyer will depend on where you’re trying to buy a home. It’s also important to note that some states require buyers to have a real estate attorney during different parts of the buying process.
But even though the majority of states don’t require buyers to procure a real estate attorney, they can still provide invaluable legal counsel related to the intricacies of home buying and the closing process.
"Purchasing a home is one of, if not the biggest, investments in a person's lifetime," says Orenstein. "The cost of engaging the services of the attorney will pay dividends in peace of mind from certifying that the title is clear, confirming you are purchasing what you bargained for, and ensuring that the transaction runs smoothly," Orenstein says.
For where it's not a requirement, some buyers may also want to hire a real estate attorney if they foresee a complicated buying process in their future.
Which States Require Buyers To Hire A Real Estate Attorney?
The following 22 states and district have regulations when it comes to real estate transactions, reports Realtor.com:
- District of Columbia
- New Hampshire
- New Jersey
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
The Bottom Line
Buying a home can be a complicated financial transaction and a multistep process. As a first time home buyer, procuring an attorney’s services can help ensure a smooth closing process. The additional expense can save you further headache down the road in case unforeseen issues pop up with the property, loan, or contract.